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NEWS
EDGE Evolution Attractive
Upgrade to Many Operators for Good Reason
While the high-end 3G and 4G air-interfaces will certainly take a good share of all of the mobile wireless subscribers worldwide, the movement to even higher mobile wireless penetration in a world in which most established mobile markets have reached saturation levels can only mean bigger and better things for less-than-LTE GSM-based variants such as EDGE Evolution.
As mobile operators establish themselves further in emerging markets and infrastructure manufacturers continue to see the money in serving all types of mobile markets EDGE Evolution is a great example of manufacturer ingenuity; a strong air interface with a lower cost per pop than a WCDMA or Long Term Evolution mobile network without leaving the subscriber feeling left out.
Why EDGE Evolution along
with LTE and Mobile WiMAX
There are currently over 3.8 billion mobile subscriptions in
the world out of a global population of approximately 6.7 billion persons at
year-end 2008, a global service penetration of 56%. Meanwhile, service
penetration is at or above the 85% mark in most developed nations and above
100% throughout Western Europe.
Mobile service penetration in emerging markets such as Asia Pacific and the Middle East/Africa regions stands at 45%, and 39%, respectively while penetration in Eastern Europe and Latin America is over 85% and 70%.
The implications are clear; the only way to achieve substantial gains in subscribers in the future is by tapping into the remaining 45% of the global population that lacks phones. But doing so will be a challenge because most of these individuals have limited purchasing power and many are near or below poverty.
Basic GSM networks will be an important tool to access these users. EDGE Evolution will be used to create a migration of low income users to data services and to extend the life, capabilities and payback opportunities of basic GSM networks, an important attribute since ARPUs will be low.
Gross National Income
Disparities
Average revenue per user (ARPU) in the emerging economies of
Southeast Asia, East Asia, the Middle East and Africa varies, but is typically
less than one quarter of those found in leading economies found in North
America, Western Europe, and the leading economies of Asia.
Mobile wireless carriers in these less-developed wireless nations will wait until 3G, 3.5G, and 4G platforms are far down their cost reduction curves before deploying these technologies in a substantive way to their existing user base, which generally consists of an affluent minority and a larger but still relatively small middle class.
Carriers and vendors in these emerging markets are looking at ways to create a profitable business case at monthly ARPU levels of from $3 to $6. Doing so will require low cost handsets below $30, an earmark defined by the Emerging Market Handset Initiative launched several years ago, and, of course, cost-effective networks.
Both these facts mean operators will need cost-effective base stations and a BTS which can provide attractive (large) cell sizes to address rural areas, thus helping minimizing capital expenditures. The inclusion of dual antenna terminals within EDGE Evolution allows carriers to create larger cells than current EDGE and GPRS technologies and it represents an attractive 3G solution for low ARPU potential subscribers as they move beyond basic voice services.
EDGE Evolution will provide carriers with an attractive and cost effective means to offer data services to high value existing subscribers in emerging markets today and an attractive means of providing coverage and data to users in rural areas in all markets. EDGE Evolution is a simple migration that can be applied after some or all initial investment from a GSM network has been recouped.
Established Market
Use as Well
EDGE was originally envisioned as a low cost 3G at a time
when 3G (WCDMA) was expensive. WCDMA base station and handset prices have
fallen substantially since their introduction in 2001, nonetheless GSM equipment
is less expensive on average and the lowest cost GSM devices are less than half
the cost of the lowest price WCDMA devices.
While many carriers in emerging markets of Latin America, Africa, the Middle East and Asia continue to seek a means to extend the life of existing GSM networks throughout their network or beyond elite urban, and typically wealthy, portions of their coverage area, carriers in established markets are also looking to use EDGE Evolution
Mobile wireless carriers in the United States and leading mobile operators in Asia, Latin America and Eastern Europe will roll out 3G and even 4G but they're coverage is or will be built out slowly and certain rural or otherwise lightly populated zones are unlikely to receive 3G or 4G coverage ever or for an extended 5-8 year time period after the initial 3G/4G deployments begin. EDGE Evolution will be employed to fill these gaps in GSM-based networks.
Carriers that already have substantial WCDMA networks up and running are a different matter and while investment in EDGE Evolution will depend on a carrier-by-carrier basis, some generalities will likely hold true.
Western European carriers that hold 900 MHz GSM spectrum and have deployed 2100 MHz WCDMA are unlikely to invest much in EDGE Evolution. It will be more economical to invest in deploying UMTS/WCDMA in the 900 MHz band.
We believe that Western European carriers who operate on 1.8 GHz are the best targets for EDGE Evolution in Western Europe, especially if they have limited or no WCDMA deployment in one or more the markets they operate in. In the United States GSM carriers will also likely deploy EDGE Evolution due to the vast land mass they must cover to supplement WCDMA deployments.
© 2009, Visant Strategies